Ohio hit by dramatic rise in HMO preumims

NEW ROCHELLE, N.Y. – Managed care premiums are projected to rise a whopping 15 percent in 2002, according to an annual survey published in the Aug. 15 issue of “Managed Healthcare Market Report.”

The increase – higher than the 11 percent to 12 percent hike pushed through in 2001 – has employers reeling. States hit particularly hard include Texas, Florida, New Jersey, Ohio, Iowa and Alabama.

The results are based on interviews with more than 75 major employers, coalitions, health plans and benefit consultants in 28 states.

Near crisis situation. “It’s frankly terrible,” said Helen Darling, senior consultant for group benefits and healthcare at Watson Wyatt (Stamford, Conn.) “We have a crisis beginning this year that we really haven’t had since the late 1980s or early 90s,” she adds.

“This is a jaw dropper,” said Matthew Stein, assistant director of benefits administration for the University of Miami (Coral Cables, Fla.), which is expecting as much as a 45-percent increase.

Examples. Among some of the large national and regional managed care plans, Health Net is projecting a 16-percent increase in 2002 HMO premiums; Horizon Blue Cross Blue Shield of New Jersey, 15 percent to 20 percent; Oxford Health Plan, 6 percent to 9 percent; and Kaiser Permanente more than 10 percent.

Prescription drug cost increases of 15 percent to 20 percent continue to be a key driver, along with increased utilization brought on as HMOs loosen the reins on medical management.

Higher provider reimbursements are also hitting home, the result of tough negotiating stances taken by hospitals and physicians over the past 18 months.

Government mandates, including patients’ rights legislation giving consumers the right to sue their HMO, will only drive rates up further, the report says.

Get a copy. For information on how to obtain a copy of the report contact Corporate Research Group at 914-235-6000.